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Canada Legalizes Recreational Cannabis. What You Need to Know

By Dr. David Acheson and Cameron Prince

On June 19, Canada became the second country in the world to legalize the recreational use of marijuana on a nationwide basis – Uruguay was the first. With a vote of 52 to 29, the Canadian Senate passed the Cannabis Act (Bill C-45), with Royal Assent and official Parliament passage following on June 21. Medical use has been legal in Canada since 2001 – when the country became the first nation to legalize that use.

Once the Act takes effect, with the first sale of recreational marijuana expected to be October 17, 2018, adults (those 18 or 19 and older, depending on the province or territory) will be able to legally purchase, grow, and use a limited quantity of cannabis. There are, however, some stipulations and provincial challenges of the new law.

The October effective date does not include edibles; those don’t become legal until July 2019. Additionally, while the federal law makes it legal for individuals to grow four marijuana plants for personal use, four of Canada’s provinces are passing laws to prohibit that. The provincial laws will eventually end up in the country’s Supreme Court and likely be overturned, but until then the provincial laws are in effect.

Another area of the law that varies by province and is causing some contention, is the question of who is authorized to sell cannabis products. In general, it seems to be following the flow of liquor sales. That is, in provinces with government-controlled liquor boards, such as Ontario, sales will be allowed only at those stores. But other provinces, such as Alberta, have largely done away with their provincial liquor store systems, so private, licensed stores will need to be designated. And, across the provinces, police associations are dealing with enforcement challenges and training.

For the producers, one of the most contentious issues is Health Canada’s March publication of a regulatory draft of strict labeling requirements of recreational cannabis products, which is designed to protect “young persons and others from inducements to use cannabis.” Included were restrictions such as only a single, uniform color (inside and outside) for the packaging with no fluorescent or metallic colors, the inclusion of a standardized cannabis symbol, a mandatory health warning message, and information on THC and CBD content. Additionally, only the brand name and one additional brand element, such as a slogan or logo, could be shown; and that element must be smaller than the standardized symbol (if a graphic) or the health message (if text). With brands wanting to be able to distinguish themselves, it is an area that is seeing definite pushback from producers.

Even with the challenges, however, the Canadian framework for national legalization seems to be a good one ... one which, perhaps, the U.S. should take note of, with the growing passage of state-by-state legislation for the legalization of recreational cannabis in the U.S.

So why are we writing about cannabis in the TAG newsletter? The answer is because of the growing use of cannabis in edibles of all types. Edibles can take many forms and as we have started to explore this space we have come to realize that those in the cannabis industry making edibles generally know a lot about cannabis extraction, but not much about food manufacturing and how to do it safely.

One area in which the U.S. is ahead of Canada – at least the states which have legalized cannabis – is that of edibles. Determining that the regulation of edibles is more complex, the government is holding its legalization until July 2019 for THC-infused products. But to be ready for the 2019 roll out, a number of companies are beginning to gear up now for edibles production. Whether or not the regulation of edibles is more complex than is that of other cannabis products, we do see the production of edibles as having a certain complexity, so gearing up now is a good idea.

The complexity is primarily because many of cannabis producers have come up through that industry rather than the food industry. And we have heard many stating that as long as they are in compliance with medical and pharmaceutical-type regulations, it surely follows that they are in compliance with food regulations. But that is not really the case – for either Canadian or U.S. producers. As with any food production, there needs to be an understanding – and application – of food safety principles and regulations. Unfortunately, we know of some who are not only not up-to-date on the Safe Food for Canadians Act or U.S. Food Safety Modernization Act, and many are not even aware of HACCP. And when you are infusing an oil such as THC into your food, those processes become even more important.

For example, do you know your suppliers: Where does the THC (and other ingredients) come from? Are there any associated hazards? Is it field or greenhouse grown? Has there been any unauthorized pesticide usage? And less far back in the chain: How is the extraction and refining of the oil being done? Are there any food safety hazards introduced as a result of that, such as residual organic residues like butane?

Even if the company is fully integrated – growing, extracting, infusing and manufacturing their edibles from seed to sale, knowledge of food safety, as well as the testing and quality controls of the THC, is extremely important. And being trained in cannabis production is completely different than being trained in food production. So, we highly recommend that anyone who gets into edible needs to engage food safety experts before they start. We are seeing too many companies decide they want to manufacture edibles, so they say, “Let’s make gummies. Let’s hire a company that makes gummies and figure out how to infuse them.” Then they rush into partnerships with that food manufacture, without even knowing if they are getting a quality partner – or understanding how to determine that.

Because cannabis production is a nascent industry with high potential, there tends to be a lot of available money and venture capital. So, it really behooves anyone getting into it to make an investment in food safety – in both training, consultation, and plant structure and sanitary design. Get to know the industry you are joining; research the regulations – federal and local; understand the hazards and pitfalls of production; and don’t underestimate the costs and time to develop a successful operation – no matter which country, province/state, or local jurisdiction you choose to operate in.

Cannabis edibles are a new regulatory frontier. The margins can be high, but so are the risks if you don’t get it right.